Chapter One
Managers and
Entrepreneurs
Chapter Objectives
• Define the term management and explain the
managerial significance of the terms effectiveness
and efficiency.
• Identify and summarize five major sources of
change for today’s managers.
• Distinguish between management functions and
skills, and identify the eight basic managerial
functions.
Copyright © Houghton Mifflin Company. All rights reserved.
Chapter One | 2
Chapter Objectives (cont’d)
• Demonstrate your knowledge of Wilson’s three
managerial skill categories and explain the
significance of his research findings.
• Explain how managers learn to manage.
• Challenge two myths about small business and
describe entrepreneurs.
Copyright © Houghton Mifflin Company. All rights reserved.
Chapter One | 3
Four Realities of
Managing Today
• The only certainty today is change.
• Speed, teamwork, and flexibility are the orders of
the day.
• Managers at all levels need to stay close to the
customer.
• Without continuous improvement and lifelong
learning, there can be no true economic progress.
Copyright © Houghton Mifflin Company. All rights reserved.
Chapter One | 4
Management Defined
• Management
– Management is the process of working with and
through others to achieve organizational
objectives in a changing environment.
– Management entails the effective and efficient
use of limited resources.
Copyright © Houghton Mifflin Company. All rights reserved.
Chapter One | 5
Figure 1.1: Key Aspects of the
Management Process
Copyright © Houghton Mifflin Company. All rights reserved.
Chapter One | 6
Working with and
Through Others
• Management is a social process in which
managers get things done by working with and
through others.
• Shortcomings of “derailed” managers
–
–
–
–
Problems with interpersonal relationships
Failure to meet business objectives
Failure to build and lead a team
Inability to change and adapt during a transition
Copyright © Houghton Mifflin Company. All rights reserved.
Chapter One | 7
Achieving Organizational
Objectives
• An objective is a target to be strived for and
attained.
– Challenging yet achievable objectives provide
guidance for effective and efficient actions by
individuals and organizations.
Copyright © Houghton Mifflin Company. All rights reserved.
Chapter One | 8
Balancing Effectiveness
and Efficiency
• Effectiveness
– Entails promptly
achieving a stated
organizational objective
– Managers are held
responsible for
attaining objectives.
Copyright © Houghton Mifflin Company. All rights reserved.
• Efficiency
– Entails balancing the
amount of resources
used to achieve an
objective against what
was actually
accomplished
– Managers must not
waste scarce and
costly resources.
Chapter One | 9
Figure 1.2: Balancing
Effectiveness and Efficiency
Copyright © Houghton Mifflin Company. All rights reserved.
Chapter One | 10
Figure 1.2: Balancing Effectiveness
and Efficiency (cont’d)
Copyright © Houghton Mifflin Company. All rights reserved.
Chapter One | 11
Figure 1.2: Balancing Effectiveness
and Efficiency (cont’d)
Copyright © Houghton Mifflin Company. All rights reserved.
Chapter One | 12
Making the Most of Limited Resources
•
•
•
•
We live in a world of scarcity.
There is a lopsided use of resources.
Our planet is becoming increasingly crowded.
Over 80% of the world’s population lives in poor
and less-developed countries.
• Managers are responsible for the efficient and
effective use of the basic factors of production–
land, labor, and capital.
Copyright © Houghton Mifflin Company. All rights reserved.
Chapter One | 13
Coping with a Changing
Environment
• Five Major Sources of Change for Today’s
Managers
–
–
–
–
–
Globalization
Environmentalism
An ethical reawakening
The Internet and the e-business revolution
The evolution of product quality
Copyright © Houghton Mifflin Company. All rights reserved.
Chapter One | 14
Copyright © Houghton Mifflin Company. All rights reserved.
Chapter One | 15
The Evolution of Product Quality
•
•
•
•
The fix-it-in approach
The inspect-it-in approach
The build-it-in approach
The design-it-in approach
Copyright © Houghton Mifflin Company. All rights reserved.
Chapter One | 16
Ethical Problems in the Workplace
•
•
•
•
•
•
Lying to supervisors
Lying on reports or falsifying records
Stealing and theft
Sexual harassment
Abusing drugs or alcohol
Conflict of interest
Copyright © Houghton Mifflin Company. All rights reserved.
Chapter One | 17
What Do Managers Do?
• Managerial Functions
– General administrative duties that need to be carried
out in virtually all productive organizations to achieve
desired outcomes
• Managerial Skills
– Specific observable behaviors that effective managers
exhibit
• Managerial Roles
– Specific categories of managerial behavior that
managers use to achieve desired outcomes
Copyright © Houghton Mifflin Company. All rights reserved.
Chapter One | 18
Figure 1.3: Identifiable Functions in the
Management Process
Copyright © Houghton Mifflin Company. All rights reserved.
Chapter One | 19
Managerial Functions
• Planning
– Formulating plans and setting objectives to provide
direction for future courses of action by the organization
• Decision Making
– Choosing among the alternative courses of action
• Organizing
– Deciding on the human resources structure of the
organization
• Staffing
– Recruiting, training, and developing people who can
contribute to the organization
Copyright © Houghton Mifflin Company. All rights reserved.
Chapter One | 20
Managerial Functions (cont’d)
• Communicating
– Providing information, direction, and feedback
• Motivating
– Providing meaningful work and valued rewards to
individuals pursuing collective objectives
• Leading
– Serving as role models and adapting management
styles as the situation demands
• Controlling
– Comparing desired results with actual results and
taking corrective action as needed
Copyright © Houghton Mifflin Company. All rights reserved.
Chapter One | 21
Figure 1.4: Wilson’s Managerial Skills
Copyright © Houghton Mifflin Company. All rights reserved.
Chapter One | 22
Figure 1.4:
Wilson’s Managerial Skills (cont’d)
Copyright © Houghton Mifflin Company. All rights reserved.
Chapter One | 23
Figure 1.4:
Wilson’s Managerial Skills (cont’d)
Copyright © Houghton Mifflin Company. All rights reserved.
Chapter One | 24
Mintzberg on Managers
• Characteristics of Typical Managers
– Overburdened with obligations
– Cannot easily delegate tasks
– Driven to overwork
– Forced to do many tasks superficially
– Work pace characterized by brief interactions, frequent
interruptions, and a high reliance on verbal
communication
Copyright © Houghton Mifflin Company. All rights reserved.
Chapter One | 25
Some Managerial Facts of Life
(with No Sugar Coating)
• What Managers Lose the Right to Do
–
–
–
–
–
–
–
–
Lose their temper
Be one of the gang
Bring personal problems to work
Vent frustrations and express opinions at work
Resist change
Pass the buck on tough assignments
Get even with adversaries
Play favorites
Copyright © Houghton Mifflin Company. All rights reserved.
Chapter One | 26
Some Managerial Facts of Life
(with No Sugar Coating) (cont’d)
• What Managers Lose the Right to Do (cont’d)
– Put self-interests first
– Ask others to do what they wouldn’t do
– Expect to be immediately recognized and rewarded for
doing a good job
Copyright © Houghton Mifflin Company. All rights reserved.
Chapter One | 27
Learning to Manage
• How Do Managers Learn to Manage?
– By attending the school of “hard knocks”
•
•
•
•
•
•
•
Making a big mistake
Being overstretched by a difficult assignment
Feeling threatened
Being stuck in an impasse or dilemma
Suffering an injustice at work
Losing out to someone else
Being personally attacked
Copyright © Houghton Mifflin Company. All rights reserved.
Chapter One | 28
Figure 1.5: The Honeymoon Study:
How Managers Learn to Manage
Copyright © Houghton Mifflin Company. All rights reserved.
Chapter One | 29
How Can Future
Managers Learn to Manage?
• Future managers can learn by
– Integrating management theory (i.e., formal training and
education) and managerial practice (e.g., work-study
and internships)
– Observing role models
– Learning from experiences in the school of hard knocks
Copyright © Houghton Mifflin Company. All rights reserved.
Chapter One | 30
Figure 1.6: Acquiring the Ability to Manage
by Merging Theory and Practice
Copyright © Houghton Mifflin Company. All rights reserved.
Chapter One | 31
Small-Business Management
• What Is a Small Business?
– An independently owned and managed profit-seeking
enterprise with fewer than 100 employees
• Exploding Myths about Small Businesses
– The 80%-failure-rate myth
• Research shows a failure rate of only 18% for small
businesses over an 8-year period.
– Low-wage-jobs myth
• Rapidly growing small businesses (“gazelles”) accounted for
56% of new job growth and added to the majority of highpaying jobs from 1980 to 1990.
Copyright © Houghton Mifflin Company. All rights reserved.
Chapter One | 32
Copyright © Houghton Mifflin Company. All rights reserved.
Chapter One | 33
Entrepreneurship
• Entrepreneurship
– The process by which individuals–either on their own or
inside organizations–pursue opportunities without
regard to the resources they currently control
• Limits: The Entrepreneur’s Dilemma
– Either grow with the company or have the courage to
step aside and turn control over to professional
managers with the requisite administrative skills
Copyright © Houghton Mifflin Company. All rights reserved.
Chapter One | 34
Copyright © Houghton Mifflin Company. All rights reserved.
Chapter One | 35
Terms to Understand
•
•
•
•
•
•
Management
Effectiveness
Efficiency
Offshoring
Internet
e-Business
Copyright © Houghton Mifflin Company. All rights reserved.
•
•
•
•
Managerial functions
Managerial skills
Small business
Entrepreneurship
Chapter One | 36
Skills and Tools
• How to Find the Right Job
1.
2.
3.
4.
5.
6.
Assess yourself.
Draft a mission statement.
Brainstorm.
Network.
Research companies.
Be aware of your abilities and the realities of work.
Copyright © Houghton Mifflin Company. All rights reserved.
Chapter One | 37
Skills and Tools (cont’d)
• Secrets to Success Once You’ve Found the Right
Job
1. How you think is everything.
2. Decide upon your true dreams and goals.
3. Take action.
4. Never stop learning.
5. Be persistent.
6. Learn to analyze.
7. Focus your time and money.
8. Don’t be afraid to innovate.
9. Deal and communicate.
10.Be honest and dependable.
Copyright © Houghton Mifflin Company. All rights reserved.
Chapter One | 38